Nissan's UK business tough to sustain without Brexit trade deal

Nissan, which employs 7,000 people at Britain's biggest auto plant in Sunderland, in June urged for an orderly balanced Brexit.
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| Updated on: 18 Nov 2020, 11:08 AM
FILE PHOTO: A man wipes the brand logo of Nissan Motor on the front nose section of the company's new Ariya all-battery SUV (REUTERS)
FILE PHOTO: A man wipes the brand logo of Nissan Motor on the front nose section of the company's new Ariya all-battery SUV (REUTERS)
FILE PHOTO: A man wipes the brand logo of Nissan Motor on the front nose section of the company's new Ariya all-battery SUV (REUTERS)
FILE PHOTO: A man wipes the brand logo of Nissan Motor on the front nose section of the company's new Ariya all-battery SUV

Any final exit by Britain from the European Union that worsens business conditions through increased tariffs would threaten the sustainability of Nissan Motor Co's UK operations, the Japanese car maker's chief operating officer (COO) cautioned.

Nissan, which employs 7,000 people at Britain's biggest auto plant in Sunderland, north-eastern England, in June urged for an "orderly balanced Brexit". Its latest warning, however, comes as the EU cautions Britain it has less than 10 days left to secure a deal that will govern trade from next year.

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"If it happens without any sustainable business case obviously it is not a question of Sunderland or not Sunderland, obviously our UK business will not be sustainable, that's it," Nissan's COO Ashwani Gupta told Reuters on Wednesday.

(Also read | UK carmakers sink almost $1 billion into Brexit preparation)

Almost 11 months after it formally quit the union, Britain and the EU have still not worked out a deal that will affect nearly $1 trillion in annual trade following a transition period that has kept custom rules in place.

Prime Minister Boris Johnson has warned his top ministers that a trade agreement is far from certain, but that Britain would thrive with, or without, a deal.

File photo of Nissan logo
File photo of Nissan logo (REUTERS)
File photo of Nissan logo
File photo of Nissan logo (REUTERS)

Nissan in March said it will push ahead with a 52-million-pound ($69 million) expansion at Sunderland to build its new Qashqai sports utility vehicle.

When it announced the plan in 2016, Nissan, which builds it Leaf electric cars there, said Britain had reassured it Brexit would not affect its competitiveness.

(Also read | Bentley will have to fight to make next cars in post-Brexit UK)

But tariffs resulting from a no-deal Brexit would raise costs for Nissan, while any delay in parts supply from overseas due to new customs checks could slow production.

Gupta said Nissan was not seeking compensation from Britain for costs incurred from any no-deal Brexit, contradicting press reports that it and Toyota Motor Corp would do so.

"We are absolutely not thinking that and we are not discussing it," he said.

On a separate plan announced by Johnson to move up a UK ban on new petrol and diesel cars and vans to 2030 from 2035, the Nissan executive said his company was ready to respond.

"That is not only the UK's transition plan, every country is talking about electrification. We are ready."

First Published Date: 18 Nov 2020, 11:08 AM IST
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